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Myanmar was ostracised by the international community for decades due to the rule of its military junta and the lengthy house arrest of democracy leader Aung San Suu Kyi.

But the release of political prisoners including Ms Suu Kyi and successful elections last year has seen Myanmar embraced by many western leaders. Progress in resolving long-running ethnic conflicts has also heartened international observers.

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Myanmar has loosened up its trade and investment rules, prompting great interest from foreigners looking to establish economic links with the resource rich country.

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The former military general told reporters that he recognised human rights concerns but said that his country is making the ''transition to peace''.

''What we are undertaking has no precedent in modern times,'' Thein Sein said.

Ms Gillard said there was ''much to do'' in Myanmar to improve human rights and national reconciliation.

''But we have been very admiring of the remarkable amount of progress . . . and we are optimistic of further progress,'' she said.

Ms Gillard also revealed a trade commissioner would also be posted to Yangon, the Myanmar capital.

Austrade announced this post would be filled by Mark Wood, a senior Austrade official who has worked in South Korea, Hong Kong and Thailand. He takes up his post in May.

In addition, Australia would also provide an additional $20 million over two years for the first phase of the new ''Myanmar-Australia Partnership for Reform'', she said.

The visit of Mr Thien, a former senior general, is the first by a Myanmar leader to Australia since 1974.

Greens spokesman Scott Ludlam said the situation was still ''grim'' in Myanmar despite recent reforms, and that the fledgling democracy there was fragile.

"Foreign Minister Bob Carr should offer Australia's assistance in ensuring the 2015 general election is conducted without intimidation and threat of imprisonment of candidates, so that all Myanmar citizens – including those in the ethnic minority areas – can exercise their civil and political rights in the lead up to the poll,'' he said in a statement.